Ulltveivt-Moe Advanced Composites, hydrogen tank maker, gets Chinese contract worth 50M Eur, eyeing IPO.
[Finanavisen] A lot has gone wrong for Jens Ulltveivt-Moe in recent years. A number of failed investments in the green shift have led to the investor’s wealth falling from NOK 8.3 billion in 2007 to NOK 800 million on last year’s Capital List of Norway’s 400 richest people.But now it may look as if the 78-year-old has hit the mark with Umoe Advanced Composites (UAC). This company produces pressure tanks for the transport of energy gases, and is a competitor of the Hexagon companies Purus and Composites.
UAC has now received an order to deliver pressure tanks for hydrogen to two Chinese customers for around NOK 500 million.
UAC has a pressure tank technology that provides large environmental and cost savings compared to competing products. The hydrogen market is expected to grow significantly in the coming years, and we are very well positioned to become a significant player in important markets. With our breakthrough in China, the goal is to grow strongly in the coming years, says CEO Øyvind Hamre of UAC.
Ulltveivt-Moe Advanced Composites, hydrogen tank maker, gets Chinese contract worth 50M Eur, eyeing IPO
Investing in China
Ulltveit-Moe currently owns 92 percent of the shares in UAC, while Hamre holds 6 percent of the shares. In connection with the agreement in China, however, Chinese Yield Capital will invest an unknown amount to become a minority owner in the company.
Most of Yield Capital’s investment in UAC will be earmarked for the establishment of a joint venture in China. UAC becomes the majority owner of this joint venture, with an ownership share of 50,001 percent. Other owners are Yield Capital’s renminbi fund in collaboration with the Chinese industrial group Befar Group, which is one of China’s 500 largest companies.
– The purpose of the joint venture company is to build a factory in China with an estimated annual capacity of 12,000 pressure tanks. Such a factory will provide significant economies of scale and a significantly better competitive position for UAC in all markets, not least in China and the rest of Asia, where the hydrogen market is growing strongly, says Hamre.
Yield Capital is the investment fund of the Beijing Tsinghua Industrial R&D Institute, the main architect behind China’s hydrogen value chain and part of China’s leading technology university, Tsinghua University.
READ the latest news shaping the hydrogen market at Hydrogen Central
Gets economies of scale
– The factory in China will give us powerful economies of scale and make us relevant to customers who are planning their expansion with conventional steel tanks. At the same time, the partnership with Befar Group and Yield Capital gives us market access that we believe is necessary for maximum success in China, says Hamre, who had top jobs at Hexagon before joining UAC in 2013.
While Hexagon’s tanks are mostly made of carbon fiber, UAC specializes in fiberglass tanks.
According to Hamre, fiberglass is a much cheaper material than carbon fiber, while fiberglass tanks, due to their weight advantage, can transport between two and three times more hydrogen compared to steel tanks.
– It is this product-reblated sweet spot between carbon fiber and steel that has made Chinese technology investors open their eyes to UAC, says Hamre.
Engaged ABG Sundal Collier
UAC’s head office and Norwegian production facilities are located at Vige in Kristiansand. There, the company is planning an investment that will quadruple production capacity from 1,000 to 4,000 tanks annually.
In order to realize the company’s growth plans as quickly as possible, the Umoe Group is considering listing UAC on Euronext Growth. In this connection, the company has engaged ABG Sundal Collier as financial advisor.
– We are looking at several alternatives for how we can scale up the company in the most efficient way possible, of which a listing is one possibility, says Thomas Moe Børseth, Chairman of the Board of UAC and Executive Vice President of the Umoe Group.
– We are something as rare as a company that is both involved in hydrogen, has a technological global leadership and already has a positive operating result before the upscaling. We have every opportunity to realize the further growth and expansion plans, but it is currently a little too early to conclude on the way forward, Moe Børseth adds.
Ulltveit-Moe will list Hexagon competitor on the stock exchange, 21 April 2021
